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Archive for category Poverty

The Failure of World Bank Projects in Pakistan

World Bank projects failing in Pakistan’
 
 
ISLAMABAD: Almost one third of World Bank’s (WB) multi-billion dollar credit financed projects in Pakistan have failed to achieve the desired results, official economic ministry documents exclusively available with the News disclosed.

 

According to the documents, this number has been rising for the last several years.

 

The portfolio assessment of WB’s funded projects in Pakistan reveals that the organization is responsible for funding projects – worth millions of dollars – like Project to Improve Financial Reporting and Auditing (PIFRA), FBR’s Tax Administration Reform Project (TARP) and Public Sector Capacity Building projects where amount may be lower but the impact on blocking key reforms is enormous.

 

The number of projects went up from 20 in 2007 to 24 in year 2012 while average implementation period increased from 3 years in 2007 to 3.4 years in 2012.

 

Problematic projects also increased with the passage of time as this number stood at 5 percent in 2007 which went up to 25 percent in 2012.

 

In terms of amount spent, this number was standing at 5 percent in 2007 which increased to 26.3 percent in 2012.

 

Twenty nine percent projects fell into the category of risk in 2012 while this number was standing at just 5 percent in 2007.

 

“The disbursement ratio declined significantly in recent years; standing at 37.5 percent in 2007 it was reduced to just 7.1 percent in 2012,” the document shows. The disbursement ratio stood at 33.8 percent in 2008, 39.9 percent in 2009, 18.7 percent in 2010, 62.1 percent in 2011 and just 7.1 percent in year 2012.

 

The disbursement ratio reduced last year mainly because Pakistan was not part of the IMF program so disbursement of the Washington based WB was also reduced substantially.

 

The WB is the second largest donor in recent years. The current Country Partnership Strategy (CPS) for FY 2010-14 implemented by the World Bank envisages a lending program for Pakistan worth $5.9 billion in these three years period under IBRD and IDA resources.

 

World Bank funded major programs in the budget with series of poverty linked reforms programs during the last one decade without significant results.

 

There is the Poverty Reduction Strategy Credit (PRSC-1 and II) program aimed at removing market distortions and providing support to the poor through improving markets. An amount of $500 million has been spent through budget. The loan was aimed at major reforms in the areas of agriculture markets, energy sector and public financial management. No visible results and benchmarks were achieved.

 

Next the Pakistan Poverty Reduction and Economic Support Operation (PRESO), which also received $500 million to support the structural reforms of PRSP-II for regaining and maintaining economic stability, while protecting the poor and vulnerable.

 

Under Pakistan Business Reforms Project, the sub-national Doing Business in Pakistan 2010 project benchmarked business regulations in 13 Doing Business areas across 6 cities and covered all provinces in Pakistan.

 

The project was funded by the United States Agency for International Development (USD 290,000), UK Department for International Development (USD 90,000) and the World Bank Group (USD 290,000). The Ministry of Finance and the Government of Punjab also dedicated resources and in-kind support to the project.

 

Under Punjab Education Sector Reform Program, under four IDA credits, a total of US$400 million was provided to support education reforms from 2004 through 2007. As a result of this funding, net enrolment of girls increased, teachers were trained and absenteeism reduced, examination standard improved.

 

For Social Safety Net Development Policy Credit and TA Project, the World Bank supported the BISP through the Social Safety Net Technical Assistance Project with $60 million (IDA). Another $159 million were disbursed against commitment of $200 million. Given the success of BISP in establishing itself as the national safety net platform, additional financing of US$150 million (IDA) was approved in February 2012. So far the BISP has disbursed more than US$1 billion in the form of cash grants to 3.5 million beneficiary families across Pakistan.

 

Through Punjab Municipal Services Improvement Project, WB has provided $50 million commercial loan for the project.

 

With Punjab Cities Governance Improvement, the WB committed to provide $154 million to support the province of Punjab’s cities in strengthening systems for improved planning, resource management, and accountability, and to improve the province’s capacity to respond promptly and effectively to an eligible crisis or emergency. The project will be completed in 2017. Under Natural Gas Efficiency Project, the aim of the WB project was to provide $272 million loan for reducing physical and commercial losses in the gas pipeline system.

 

Through Earthquake Emergency Recovery Project, the project initially got US$400 million through IDA funding, of which US$220 million was earmarked for the housing reconstruction component.

 

The livelihoods support and import financing components were allocated US$85 million each and US$10 million was assigned to the capacity building component. Following the floods of 2010, an additional US$300 million was provided to the import financing component.

 

World Bank also provided $350 million to support the Government of Sindh’s Medium Term Education Sector Reform Program (SERP) which is for increasing school participation, reducing gender and rural-urban disparities and increasing progression and improved measurement of student learning.

 

The rise in net enrolment as envisaged in PSLM data is used to substantiate the result which shows that net primary enrolment increased by modest 3 percentage points between 2006 and 2011. But this was in line with the increase between 2001 and 2006; which was achieved without spending government funds worth $3.3 billion.

 

Misplaced priorities?: PC chides World Bank for funding ‘failed projects’

“We do not need capacity building. Help us in undertaking reforms and do not hedge us against little things,” says deputy chairman of Planning Commission. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Amid increasing footprints of international donors, Planning Commission chief Dr Nadeemul Haque has criticised the World Bank for throwing money behind failed projects and venturing into areas that are not so important for the revival of the economy.

Haque’s remarks reflect an effort to highlight the donor-bureaucrat nexus that has led to unchecked benefits for bureaucrats and donor agencies alike, which is widening the debt burden of the country.

He was speaking at a ceremony organised to launch a report on the water and sanitation sector, prepared by the World Bank.

How such events are used to benefit the people involved can be gauged from the fact that to give a 15-minute presentation on the situation of water supply and sanitation in Pakistan, William D Kingdom, the Regional Lead Specialist Water, flew in from Washington.

Haque came down hard on the Washington-based lending agency at a time when the WB was ready to offer another $300 million in the name of tax reforms despite failure of the previous $150 million support for the same purpose. Despite Planning Commission’s opposition, the project is likely to be signed soon.

“We do not need capacity building. Help us in undertaking reforms and do not hedge us against little things,” said a visibly upset deputy chairman of Planning Commission while giving his concluding remarks.

He complained that the WB was either focusing on areas which came at the bottom of the country’s priority or the proposed solutions which have already been given in the Framework for Economic Growth – the strategy paper that the Commission believes offers solutions to all economic ills.

He said the Planning Commission gave policy guidelines without seeking donor funding and the WB would always conduct research in areas where it wanted to give money without caring about the outcome.

Haque also admitted the failure of the government in funding research and implementing reforms in all spheres, which eventually provided an opportunity to the donors to do work according to their will.

He said in the Framework for Economic Growth “we came to the conclusion that people need a lot more.”

“Water and sanitation is important in people’s life, but they need a lot more. They need liberty and happiness and this requires reforms, which neither the government nor the WB is ready to support,” said Haque, who could not make a dent despite remaining the head of an institution that is supposed to be ahead of present times.

He argued that the WB was ignoring critical areas like energy and civil service reforms and without conducting studies in these two areas and eventually initiating meaningful reforms the country could not progress.

He disclosed that the WB had frankly told him that it could not cooperate in these areas. “In Pakistan, bureaucracy controls everything and without civil service reforms the country cannot be put on the path of sustainable development,” he added.

Published in The Express Tribune, April 25th, 2013.

 

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Escaping Pakistan’s poverty trap

Escaping Pakistan’s poverty trap

Millions are working their way out of poverty in Pakistan thanks to one man’s vision

Shoaib Sultan Khan, who set up the Rural Support Programme 30 years ago

Shoaib Sultan Khan, who set up the Rural Support Programme 30 years ago Photo: Eduardo Diaz
 

7:00AM GMT 04 Mar 2013

 

We were on the road from Gilgit to Sost, in the far north of Pakistan, a journey that follows the Silk Route taken for millennia by merchants on the road to China.

We passed the site of the battle of Nilt, where three Victoria Crosses were awarded after a desperate fight in 1891 between British forces and local tribes.

We reached a great gorge where, according to geologists, the subcontinent of India crashed into Asia, the catastrophic event that threw up the Karakoram mountain range through which we were travelling. Around us were glaciers and great snow-packed mountains of 25,000ft or more.

The Karakoram mountains have still not settled. Three hours’ drive north of Gilgit, the capital of Gilgit-Baltistan province, we reached the spot where in 2010 a mountain had collapsed into the Hunza river, destroying the road and creating an enormous lake.


Lake Attabad, between Gilgit and Sost (EDUARDO DIAZ)

My travelling companion, 79-year-old Shoaib Sultan Khan, was taking me back to where the final stage of his awesome life story had begun.

Exactly 30 years ago, when General Zia-ul-Haq was in power in Pakistan, Khan was commissioned by the Aga Khan to combat the endemic poverty and backwardness of Pakistan’s northern areas. Khan, who was working in a Sri Lankan forest village when he was hired, had spent his life in development work. He was already convinced that democratic village institutions held the key to releasing the rural masses from poverty. He set up the Aga Khan Rural Support Programme to put his insights into practice.

Khan stayed for 12 years in Gilgit and Chitral, a town 100 miles to the west, moving from village to village and living among the people. The only money he had at his disposal came at first from a $400,000 annual grant from the Aga Khan – a pinprick in such a vast area. Though other donors (including Britain’s Department for International Development) followed, the small sums involved meant the only way he could bring about change was by persuading local people to do it themselves.

Yet during this period living standards improved more than twofold, according to World Bank figures. Literacy rates soared from a negligible three per cent in 1982 to 70 per cent or more today. Women – hidden from view across much of the rest of Pakistan – have obtained a fuller and more confident economic and social role.

Today Gilgit and Chitral are two fragile islands of stability in a part of the world given over to terrorism and war, in the surrounding tribal areas of Pakistan and in neighbouring Afghanistan. They alone have largely escaped the contagion. One of the most important reasons for this is Shoaib Sultan Khan. In the areas where he has worked there are jobs, means of livelihood, reasons for hope. So in the course of our journey, I asked him to explain how he set about transforming the lives of the people in these tough but incredibly beautiful areas.


Commuters cross Lake Attabad (EDUARDO DIAZ)

‘In every village I went to,’ he replied, ‘I was very blunt and would tell them that I have not come to listen to your problems nor your needs because I don’t have the resources to do anything about these. But I have come with the conviction that you have potential and we would like to unleash that. So I offered them a development partnership, which entailed their having to do something first before the programme can do anything. I told them that individually I would not be able to help and could only help if they got organised. And that organisation has to be in the common interest of the group.

‘My second condition to them was: you have to identify one of your own men or women as the activist who will lead the organisation. No outsider can do that. My third condition was saving. Since capital is power, you must generate your own capital through savings. However poor, you must save something – even one rupee a week.’

This model subverted the conventional model of social development, which assumed that either central government or outside agencies would lift people out of poverty. Years of experience had taught Khan that this method never worked, and that only the villagers themselves understood what they needed. Central to his vision were the community activists.

‘The basis of our system is to identify leaders,’ he told me. ‘I had no more than 200 of these at most at the start. Now we have 10,000. These were the ones who developed this area. I used to say these community activists are our diamonds. They gave the shine, glitter and permanence to our organisation. The qualities we looked for were twofold. First, they needed to be honest, because they had to do the work themselves and, second, they should be prepared to act for others besides themselves.’

It was the activists in Sost who came to Khan and told him that they wanted to build an irrigation channel deep into the mountain to reach the glacier.

‘Our engineers had a look and said that it was not possible,’ he said. ‘But when we came back three months later we found that they had started work by themselves and dug 200m without our help.’

Incredibly, no machinery of any kind was used. The villagers had hacked into the mountainside with the aid of nothing more than rudimentary equipment: shovels, pickaxes, digging bars and hammers of various sizes. ‘We thought, if they can dig 200m then they can dig for a kilometre and a half,’ Khan said. ‘So we gave them assistance.’


A worker in an irrigation tunnel dug through the mountain at Sost (EDUARDO DIAZ)

The initial grant amounted to only 55,000 rupees (about £700). Later the villagers were given materials worth a further £2,000. That was all it cost to turn thousands of acres of barren and desolate land into orchards, plantations and fields.

Khan himself comes from a thoroughly conventional background. Born in Uttar Pradesh, India, he was educated at Lucknow University and Cambridge, and then worked in the Pakistan civil service for two decades. But in Gilgit he found himself taking part in what amounted to a revolution. For centuries the Hunza Valley had been controlled by the Mirs, feudal rulers who denied rights to their people and demanded free labour from the villagers. It is no coincidence that many of his early activists had been involved in a revolutionary struggle against the Mirs in the three decades that followed Pakistan’s independence in 1947.

In the village of Karinabad I found Syed Yahya Shah, who told me how he had been incarcerated in Gilgit’s notoriously harsh Chilas prison for two years at the height of the struggle in the 1960s, before being released on the orders of President Ali Bhutto, who put an end to the power of the Mirs.

Now an old man with a white beard, Yahya Shah told me that ‘I was a hero to the people when I returned home.’ He said that when Shoaib Sultan Khan arrived, his method of ‘mobilising people at grass roots was something I had already done and that appealed to me. The first thing I did,’ he continued, ‘was to learn exactly what Shoaib Sultan Khan’s organisation, the Rural Support Programme, was saying. Then I went to all the villages and became part of the team. Our first achievement was to inculcate the sense of self-reliance.’


Yahya Shah (EDUARDO DIAZ)

Yahya Shah said the most difficult task was to encourage farmers to act collectively. Thirty years ago one member of every household was brought up as a hunter, expected to journey into the mountains and kill wildlife. As a result the local snow leopard, ibex, Marco Polo sheep and markhor mountain goats were near extinction. The villagers also ruthlessly cut down trees for firewood in the higher parts of the valley, opening the way to soil erosion and floods.

But Khan’s Rural Support Programme taught the villagers a new way of doing things. Once they had formed village organisations, and started to cooperate instead of pursuing their separate interests, everything changed. They planted trees in the areas opened up for cultivation on the mountainside. Meanwhile, hunting was banned. The village hunters were hired instead as waged staff (initially paid by the project) to survey the wildlife and deter poachers, thus turning them into guardians rather than destroyers of the environment.

Every year a handful of international trophy hunters are now invited to bid on the internet for the privilege of killing a mountain goat, the proceeds being paid back to local people (and now covering the wages of the former hunters). The villagers opened up new irrigation channels and pioneered agricultural techniques. As a result the upper Hunza Valley is today an idyllic spot. Dominated by massive mountain peaks, it is full of poplar plantations, apple orchards and flourishing small businesses.

Women’s groups emerged. I visited one in Chinar, a suburb of Chitral, which started with only half a dozen members 15 years ago; more than 100 households have joined since. It has saved some four million rupees (£26,000), a colossal sum that dwarfs the 1.6 million (£10,000) raised by local men. Sitting cross-legged on a classroom floor, one member, Musarat, told me, ‘We used to be economically dependent on the men. Today they depend on us. They come to us to borrow money.’


Women trainees in a wood workshop in the Hunza Valley (EDUARDO DIAZ)

These women have never been allowed to attend the local bazaar, so they have set up a trading zone of their own higher up the hill. Each one I spoke to had started a business. Musarat, who runs a garment shop, told me how she had been sent by the Rural Support Programme on a course in management and enterprise. She in turn trained up Nazia, who now has a shop selling local vegetable produce, and Johanara, who sells ribbons and buttons.

These women have made use of their savings to set up an internal banking operation, with 1,131,000 rupees (£7,500) given out in loans this year alone. Musarat told me that they made a 200,000 rupee (£1,300) profit last year, and there has never been a default. She showed me three immaculately kept ledgers recording loans, savings, and the names of those present at their regular meetings, along with the minutes of their discussions. Since the arrival of the Rural Support Programme the lives of these women have become purposeful and confident. They have been given new lives.

Up in Sost the manager of the women’s organisation is Mehr Kamil, a very impressive 38-year-old mother of three who works as a teacher. Her organisation has 170 members and has amassed savings of three million rupees (£20,000). It operates an active loan portfolio, and has never had a bad debt.

I challenged Shoaib Sultan Khan with the claim that his concept of social development, which involves a rejection of the state, was essentially capitalist, and he pondered for a while. ‘No,’ he said. ‘Capitalism is about big ownership. We support small ownership and people in cooperation, the 100-hectare farmers.’

Khan’s teaching is highly sceptical of the state because of its remorseless insistence that villagers stand on their own feet and take care of their own lives. But Khan also recognises that just as the state can rarely produce sustainable change, people can achieve little unless they work as a community. His funding from the Department for International Development was ended two years ago, he said, with no reason given.

Gilgit and Chitral are oases of relative prosperity, but these two jewels in the far north nevertheless remain vulnerable to the terrorism that has become commonplace through the rest of this anguished part of Pakistan. As I left the country, the prime minister, Raja Pervez Ashraf, warned of the ‘wave of deadly sectarian violence that has gripped the tourism haven’. He was referring to the massacre a few weeks earlier of 24 bus passengers by Sunni terrorists near Gilgit.


Members of the women’s organisation in Sost (EDUARDO DIAZ)

I travelled along the road where this atrocity occurred on my journey between Gilgit and Chitral, a 14-hour marathon across the Shandour Pass, which at 12,000ft hosts the highest polo ground in the world. The villages we passed through looked peaceful, as farmers gathered in their harvest ahead of the coming winter. There was no disguising, however, the underlying nervousness and fear. At one of the security checkpoints a soldier asked us for a lift. The police had held him back for three days, he said, because they feared that as a Shia he would be killed if he continued on his own.

Such is the scale of the sectarian hatred that at another checkpoint my guides were asked to declare whether they were Shia, Sunni or Ismaili. I was later told that four hours after we had completed the journey the road had been closed. No reason was given but I was told that suspected terrorists had been captured on the road. In the town of Gilgit itself, life is now lived on sectarian lines. One local man told me that ‘there is one hospital for Sunni, one for Shia, one for Ismailis’, and claimed that such is the tension that the rival sects even choose different routes to work.

Much of the trouble comes from outside. Gilgit and Chitral have always been of importance because they are on the road that links India and Asia. That is why, ever since the days of British rule, there have been incursions into the area. With the war against the Taliban still raging, today is no different. But there is more to it than that. As one elder, Subiday Qlaudar Khan, from Paidendas, a village south of Gilgit, told me, ‘These people don’t descend from the sky. They rely on local leaders for support. The people in the villages have been asleep. The violence is our fault.’

The only way that Chitral and Gilgit can retain their immunity from the tragic violence that has disfigured neighbouring territories is by cooperating to block the outsiders who arrive in the area intent on bringing terror, and creating the jobs and prosperity that give people reasons for hope. Shoaib Sultan Khan may be 79 years old, but his work is more important than ever before. The guardians of his legacy are the village activists of Chitral, Gilgit and the Hunza Valley. But his influence stretches far wider. Khan’s social model is today being copied in India, Japan, Korea, Sri Lanka and – most recently – across the border in Afghan­istan. It has already lifted some 30 million people out of poverty, and his unique insights have urgent lessons for the world.

 

Reference

 

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